Thanks for all the concerns, all the support emails and the good wishes. I really appreciate it...
...but this is not "Henrik's travel blog". This is not "adventures of a Cuban on a random beach". This is the site of the Lazy Trader, where we talk about the most exciting and arguably important subject on planet Earth: trading. So, here we go.
The SPX went from 2064.11 to 2066.96 on a shortened week of trading. It almost ended right where it started. However, we should see a gap down come Monday because the /ES futures lost 20 points on Friday due to a disappointing jobs report. Whether the number will be revised or not, whether the economy is getting weaker or not,.....I , I ,..I don't know! and I don't really try to forecast those sorts of things. I only need to know one thing: are we overbought, oversold or in no man's land? That's it!
(Click on image to enlarge)
McClellan: +39 (neutral)
Stocks above their 20 Day moving average: 61% (neutral)
With those numbers and with SPX right around its own 50 Day average, we are in the epicenter of no man's land. In this situation I avoid opening individual credit spreads and prefer to only use Iron Condors. However, I have two of them already on, so no new positions for me. As my next play I would like to enter a Credit spread, but for that I will need a 3% move up or down in the major indexes.
SPX 1855/1860/2200/2205 unbalanced Iron Condor
2 weeks to expiration and 98% probability of success. This position is going to be a winner. No concerns. For now this is the only April position and it will barely bring a 2% portfolio growth. Nothing spectacular but I gladly take it. I won't force new positions just for the sake of trading.
RUT 1100/1110/1330/1340 unbalanced Iron Condor
6 weeks to expiration and 82% probability of success. Time decay is now starting to accelerate. This position hasn't given me trouble so far and it looks pretty safe at this point.
Action plan for the week
Existing positions are looking great. The May RUT Iron Condor will only need adjustments this week if RUT hits 1300 or 1160. Both numbers look unlikely with RUT priced at 1255 today. So, I already set up my alerts on the platform and I'm ready to detach my self from the charts knowing it's a low probability event.
As for new trades if SPX goes up to 2120, I will sell a May 2210/2215 Credit Call spread for 0.50 credit or better. The probability of SPX going up that high in a week is remote, but I'm just throwing my idea out there.
If SPX falls down to around 2015 - 2020, I will be a happy seller of the May 1825/1820 Credit Put spread for 0.30 credit or better. I feel this is also an unlikely scenario for just a week. So, overall chances are low that I will add new positions in the next few days.
Monday should be pretty exciting in the markets because we will see the reaction to Friday's jobs report when the markets were closed. We also have the Non-manufacturing PMI that day. Other than that it will be a pretty quiet week in terms of economical releases.
Monday: US Ism Non-Manufacturing PMI
Thursday: China CPI
Take it easy, but take it anyways!
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